6.1 ASSET MANAGEMENT

waxspadeManagement

Nov 18, 2013 (3 years and 6 months ago)

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Example Agency



Chief Executive Instructions
-

Accounting Procedures

6.1 Asset Management


Page
1




6.1 ASSET MANAGEMENT

Policy

Example Agency has implemented this policy to maintain its assets and safeguard them against
theft and obsolescence. It also allows the department to meet its financial reporting
requirements with regard to assets.

Rationale fo
r Policy

The principal objective of the department’s asset management strategy is to make the most of
the service potential of an asset. This applies in the phases of acquiring, using and disposing of
the asset. It also applies to managing the risks and co
sts of the asset over its entire life.

Responsibilities and Accountabilities

The primary responsibilities and accountabilities in relation to asset management rests with the:



Financial Controller;



Directors;



Manager Finance;



Officers Recommending Disposal
of Assets; and



Officers Approving Disposal of Assets.

Financial Controller

The Financial Controller is responsible for:



ensuring that the requirements of these procedures are being met;



developing the timetable and procedures for stocktakes;



ensuring as
set revaluation exercises are conducted as appropriate;



ensuring all information technology related capital works in progress are accounted for
correctly; and



ensuring staff responsible for assets have appropriate training to fulfil the functions of their
duties.

Example Agency



Chief Executive Instructions
-

Accounting Procedures

6.1 Asset Management


Page
2




Directors

Directors are responsible for recording capital works in progress correctly providing timely
advice on completed capital works and works in progress to the Financial Controller for
recording on the Assets Register.

Manager Finance

The M
anager Finance is responsible for maintaining the department’s central Assets Register
including ensuring asset transfers and the revaluation of assets are being conducted.

Officers Recommending Disposal of Assets

Officers recommending disposal of departm
ental assets must ensure that they follow these
guidelines for the disposal of assets.

Officers Approving Disposals of Assets

Officers approving disposal must ensure that they follow these guidelines for the disposal of
assets.

Non compliance

Failure to co
mply with these procedures may result in loss to the Department, incorrect financial
statement valuations and equipment not being serviceable when required by the department.

Managers and staff are therefore accountable to the Chief Executive for the fulfi
lment of their
responsibilities under these procedures. Non compliance will be taken as a serious matter and
may result in disciplinary action or be reflected in management performance reviews.

Target users

These procedural rules are for all officers resp
onsible for asset management and asset disposal
in the department.

Procedures

The following procedures have been addressed in these guidelines:



definition of an Asset;



assets Register;



departmental acquisitions;



transfers;

Example Agency



Chief Executive Instructions
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Accounting Procedures

6.1 Asset Management


Page
3






disposals step guide;



revaluation
s;



stocktaking; and



portable and attractive items

Definition of an Asset

An Asset is:



when it is probable that a service potential or future economic benefit will eventuate; and



something that possesses a cost or other value that can be reliably measured
; and the initial
value to the entity of the item is greater than or equal to $5,000 GST exclusive ($2,000 for
ACT Executive).

Assets Register

An Assets Register is a management tool used to record the description of the asset, location,
ownership details,

quantity, condition and certain financial information relating to the asset
valuations.

The department must record in its Asset Register assets which:



have a useful life greater than one year; and



are valued over the $5,000 GST exclusive ($2,000 for ACT E
xecutive)default threshold or
other approved threshold; and/or



as individual units, may cost less than $5,000 GST exclusive ($2,000 for ACT Executive) but
may combine to form an operating unit or network or have the same or similar nature.
Where the total
unit of the combined assets is material in amount, these assets should be
recorded in the Assets Register.

Departmental Acquisitions

Assets acquisition information will be recorded on the Assets Register as set out in the
procedures below. IT related capi
tal work in progress will be monitored through a cost centre for
each project.

Step

Action

1

Goods received and invoice approved

2

Invoice sent to accounts Payable and entered onto Oracle

Example Agency



Chief Executive Instructions
-

Accounting Procedures

6.1 Asset Management


Page
4




Step

Action

3

Asset Addition/Transfer/Write
-
off form (available from Busines
s Portal
under Transactions, Finance) with a clearly marked copy of the invoice
is sent to the Financial Controller

4

Financial Controller arranges for Asset Register to be updated

Transfers

All assets transfers should be reflected on an Asset Addition/
Transfer/Write
-
off form which
should be signed by both the transferring and receiving officers and forwarded to the Financial
Controller

Disposals Step Guide

The following points provide a general guide through the disposal process.

Identify Surplus and
Obsolete Assets

The decision to dispose is influenced by a range of factors

:



items are beyond their economic life;



items are no longer required for their original purpose;



items have reached their optimum selling time to maximise returns; and/or



items are

of a hazardous nature.

Approval to Dispose of Assets

The officer recommending disposal action should:



determine condition of assets for disposal and set reserve prices;



examine the disposal options and recommend a disposal method; and



The officer recommen
ding disposal action must not be the officer approving disposal, for
control and probity reasons.

The approving officer is responsible for deciding whether:



the disposal of the asset is appropriate;



the method of disposal is appropriate, will achieve the b
est net outcome and is a fair and
open process;

Example Agency



Chief Executive Instructions
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Accounting Procedures

6.1 Asset Management


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5






appropriate action is to be taken to write
-
off or write
-
down the asset; and



adequate records of disposal exist for management, audit and review purposes.

Manage Disposal Process

Some action may need to be tak
en on assets prior to disposal. Considerations include:



decommissioning (eg removing departmental identification markers);



relocating the asset to a point of disposal; and/or



detailing the asset to increase its attractiveness to buyers.

Account for Dispos
al Revenue

Revenue from asset disposal must be treated in accordance with the ACT Accounting Policy
Manual. This includes proceeds from the disposal of departmental assets being paid into the
correct bank accounts.

Maintain Audit Trail

The Asset register
must be updated to reflect the disposal of assets. Records regarding the
disposal of all assets should be in accordance with the ACT Accounting Policy Manual for
disposal of registered assets.

Disposal of non
-
registered assets should be appropriately docu
mented and documentation
should be kept for two years before being archived or destroyed (as appropriate)

Revaluations

The departments use the deemed cost basis for asset valuation in accordance with Australian
Accounting Standards and ACT Treasury account
ing requirements. Valuation is not required to
assets, which were recorded at cost or deem cost unless there is no other reliable means exists
for establishing the value of an asset.. The method of asset valuation must be consistent within
an asset class.

Stocktaking

A departmental stocktake is to be undertaken annually for departmental assets over $5,000
GST exclusive ($2,000 for ACT Executive). Stocktake reports are to be provided to the
Financial Controller.

Stocktakes will be conducted in accordance w
ith the timetable and procedures approved by the
Finance Controller.

Example Agency



Chief Executive Instructions
-

Accounting Procedures

6.1 Asset Management


Page
6




Portal and Attractive Items

The head of each division is responsible for ensuring the maintenance of a portable and
attractive register for their division.

One officer in each division
must be assigned the responsibility of maintaining the portable and
attractive register. This officer will review minor asset purchases at least quarterly and record
any items which are considered portable and attractive and have a value of between $500 a
nd
$5,000 on the division’s portable and attractive register.

A stocktake of all portable and attractive items must be undertaken annually. The stocktake is
to be performed by an officer other than the officer responsible for the maintenance of the
regi
ster. The results of each stocktake must be provided to the relevant division head who
should then address any significant issues of concern. The division head must authorise the
removal of all lost and stolen items from the register.

Links

CEI 6.1 Ass
et Management

ACT Accounting Policy Paper


Portable and Attractive Items

ACT Government Guideline for the Disposal of Surplus Assets